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June 16, 1972

Irving KAHN and Teleprompter Corp., Defendants

Motley, District Judge.

The opinion of the court was delivered by: MOTLEY

Opinion on Second Motion for New Trial

MOTLEY, District Judge.

 Defendants Irving Kahn and Teleprompter Corporation were found guilty, after trial by jury, of three counts charging violation of 18 U.S.C. § 1952 (The Travel Act) and one count of conspiring to do so. 18 U.S.C. § 371. Succinctly, the charges were that defendants conspired with three officials of the City of Johnstown, Pennsylvania to travel in interstate commerce and use the mails and did so to promote the crime of bribery in violation of the laws of Pennsylvania in connection with the awarding of an exclusive Cable TV franchise to Teleprompter by the City of Johnstown. The three officials were indicted on these charges along with Kahn and Teleprompter.

 Mayor Kenneth O. Tompkins and J. Howard Deardorff, two of the city officials to whom the money had been paid, pleaded guilty and testified for the Government. In essence, they testified that Kahn offered first a total of $5,000, but they asked him for $5,000 each which he agreed to pay in the manner described over a period of time. The son of one of the testifying officials, Kenneth O. Tompkins, II, testified that he received the first payment of $7,500 from Kahn in New York City and mailed the same to his father in Johnstown. The balance, as the evidence disclosed, was paid by two separate checks. One check was picked up from Kahn in New York by Mayor Tompkins. The other check was mailed by a Teleprompter employee from New York to Johnstown.

 Defendants did not deny that they paid $15,000 to three Johnstown officials in connection with the awarding to Teleprompter of an exclusive Cable TV franchise or that interstate travel and use of the mails were involved in the payment. Their defense was that the $15,000 had been extorted from Kahn and Teleprompter by the three officials who threatened to cancel a validly existing franchise which Teleprompter already owned from the City of Johnstown. Kahn and Teleprompter were convicted by the jury of conspiracy and the three Travel Act counts. In addition, defendant Kahn was found guilty of perjury. 18 U.S.C. § 1621.

 Thereafter, both defendants filed motions for judgment of acquittal and, in the alternative, for a new trial. The motions were denied in an opinion and order of this court on December 16, 1971, 340 F. Supp. 485. Both defendants duly filed notices of appeal. However, before the appeals could be heard defendants moved in the Court of Appeals for an order remanding the case to this court for the purpose of making the instant motions for a new trial based upon newly discovered evidence. The motion to remand was granted. Rule 33, Fed.R.Crim.P. Defendants Kahn and Teleprompter now move for a new trial on the ground of newly discovered evidence resulting from the trial of co-defendant Robert McKee whose trial occurred subsequent to the trial of Kahn and Teleprompter.

 As set forth above, the three city officials who accepted the $15,000 payment from Kahn and Teleprompter were also named as defendants. The officials were all members of the Johnstown City Council which had the authority to award an exclusive Cable TV franchise in Johnstown in 1966. Robert McKee was one of the three city officials who also had been indicted. McKee and another councilman and co-defendant, J. Howard Deardorff, were originally represented by the same lawyer. The third councilman, Kenneth O. Tompkins, Sr., represented by different counsel, was also the Mayor of Johnstown. When the case came on for trial in October, 1971, McKee's attorney, who also represented Deardorff, advised the court that he believed there was a conflict of interest between himself and McKee since Deardorff intended to plead guilty to the crimes charged and to testify for the Government. The court thereupon severed the trial of McKee and permitted him to obtain new counsel. His case came on for trial in January, 1972.

 McKee's defense was that he accepted the money but believed it to be a campaign contribution and spent the money for this purpose. He also claimed that he had no knowledge as to how the money had been paid and therefore did not know that any interstate travel or use of the mails was involved. He was found guilty on all counts except the fourth count involving the mailing of the second check by a Teleprompter employee from New York to Mayor Tompkins in Johnstown. An appeal was taken by McKee from his conviction, which was affirmed by the Court of Appeals on June 7, 1972.

 Kahn and Teleprompter now claim that from the McKee trial arises the following newly discovered evidence warranting a new trial of their case:

 1) Warren Reitz, Sr., a Johnstown businessman interested in securing the exclusive Cable TV franchise, testified at the McKee trial concerning a conversation he had with McKee on February 1, 1966. Reitz did not testify at the Kahn-Teleprompter trial. He testified, in essence, on the McKee trial that on February 1, 1966, he appeared at a meeting of the City Council of Johnstown at which bidding on a cable TV franchise was to take place. He testified further that before the meeting McKee walked by him and commented as follows: "Warren, this is not the way to do this. You should have seen me before."

 Defendants claim that this Reitz testimony would have been helpful to them on five grounds: First, it proves that contrary to the Government's contention McKee had not been previously bribed by Kahn on January 24, 1966. Second, it proves that McKee was personally corrupt and amenable to a bribe. Third, it supports Kahn's contention that Mayor Tompkins, once he decided to characterize the $15,000 payment as a bribe and not as extortion, was in a position to coerce similar testimony from McKee and Deardorff by reason of Tompkins' knowledge of other corruption by McKee and Deardorff. Fourth, it provided an additional basis for the receipt into evidence of defendants' offer of Councilman Malinowski's testimony that one week before the trial Mayor Tompkins declared, "I'll tell you one thing, if I'm going to go down, everybody is going to go down with me." Fifth, "it might well have allowed Mr. Kahn to call McKee as a witness." (Kahn brief, p. 8.)

 Kahn claims that the Reitz evidence, known to the Government as early as June 1971, was deliberately suppressed by it in the sense that the value of the evidence to the defense could not have escaped the prosecution and that this suppression of evidence, ipso facto, warrants a new trial. United States v. Polisi, 416 F.2d 573 (2d Cir. 1969).

 Alternatively, defendants claim that without regard to the suppression question, a new trial is in order because 1) this evidence was discovered after their trial, 2) it was material to the factual issues at their trial and not merely cumulative of evidence already introduced or impeaching the character or credit of a witness, and 3) it is of such a nature that it would probably produce a different verdict in the event of a retrial. United States v. Polisi, supra.

 2) Mayor Tompkins testified at the McKee trial contrary to his testimony at the Kahn-Teleprompter trial that he had asked Kahn for cash on January 24, 1966. As to this conflict, defendants say Tompkins' admission at the McKee trial that he asked for cash was very material to the factual issues on their trial since it is tantamount to an admission that Mayor Tompkins extorted Kahn. This testimony, alone, defendants claim might produce a different result at a retrial. United States v. Polisi, supra.

 Defendant Kahn goes further, however, and asks for a hearing to determine whether the Government knew that Mayor Tompkins was not telling the truth when he testified on the Kahn-Teleprompter trial that he had not asked Kahn for cash. He then claims, of course, that if it can be proved that the prosecution knew that Tompkins was testifying falsely at defendants' trial, the prosecution's failure to correct the perjury would require a new trial without more. Napue v. Illinois, 360 U.S. 264, 79 S. Ct. 1173, 3 L. Ed. 2d 1217 (1959); United States v. Polisi, supra, Kyle v. United States, 297 F.2d 507 (2d Cir. 1961).

 3) Defendants claim that Deardorff changed his testimony at the McKee trial on the crucial question of what occurred at the Holiday Inn in Johnstown on January 24, 1966 when Kahn and the three city officials met to discuss the awarding of the franchise to Teleprompter and the payment of money. Defendants say that Deardorff testified at their trial that Kahn and the three officials had gone into the bathroom in Kahn's Holiday Inn room together where Kahn offered $15,000 to the three men in a group. Whereas at the McKee trial Deardorff testified that Kahn took him, Deardorff, aside first and asked him if a $15,000 payment would secure the votes of Tompkins, McKee, and Deardorff. Deardorff then spoke to Tompkins and McKee and reported Kahn's offer to them, which was accepted. Deardorff then called Kahn to join the group where Kahn was advised of the acceptance.

 Kahn claims that if the prosecutor knew that Deardorff's testimony at Kahn's trial was perjurious in this respect, then the prosecutor was under an obligation to correct that testimony and his failure to do so requires a new trial. Napue v. Illinois, supra. However, Kahn claims that a hearing is required to determine whether the prosecutor knew of this alleged perjury.

 In any event, says Kahn, a new trial is required even under the "less demanding" standard applicable to motions based upon newly discovered evidence where there has been no prosecutorial misconduct. What happened on January 24, says Kahn, was the basic question of fact at the Kahn-Teleprompter trial, therefore Deardorff's changed version ...

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